Members present:
Chair: Greg Frigo | Management: Robert Oyler, James Buchen, Daniel Petersen, Ed Lump,Earl Gustafson | Labor: Dennis Penkalski, Phil Neuenfeldt

Dept. of Workforce Development staff present: Bill Clingan, Brian Bradley, Al Jaloviar, Richard Tillema, Carol Laudenbach, Mary Anderson, Carla Breber, Michelle Kho, Tom Smith, and Jim Pflasterer. Appearances by DWD Secretary Roberta Gassman and Rose Lynch.

Item 1. Opening Remarks. Mr. Frigo opened meeting at 10:15 a.m.

Item 4. DWD/DOR Combined Quarterly Wage Reporting Proposal. Mr. Frigo stated that Dept. of Revenue was not going to be at this meeting but that DOR received the Council’s letter requesting additional information. DOR employee Martha Goertsch stated that she would give a response that we could discuss at the next Council meeting. DWD UI put together some information relating to costs of this proposal [handout]. Ms. Anderson discussed the cost estimates and explained the assumptions behind establishing those costs. The handout shows one-time upfront cost and ongoing costs.

Item 7. Rule DWD 100.02(28) - Definition of Full Time Work. Last bill cycle in [2001] Act 35, the Council agreed to change the definition of full-time work from 35 hours to 32 hours per week. It was one of four rule changes upon which members agreed. At the last meeting, the need was stated for the Council to approve the rule change. No questions came from Council, and it was determined that the rule needed to be discussed in caucuses.

Item 8. b. Correct erroneous cross references in approved training statute. Will save this item for next meeting.

Item 8. a. Fix social security pension offset provision to conform with federal law as required by U.S. DOL. Mr. Smith stated that the Council [reduced and then] eliminated the social security pension offset in the last bill. The U.S. Dept. of Labor then sent the department a letter [see UIAC packet] stating that our statute was lacking specific language to conform with federal law. The department proposal [see packet] seeks to amend our law to use the language required by DOL. Mr. Frigo stated that this proposal makes no substantive change – it is merely a technical change to comply with the DOL’s letter. Proposal was approved by unanimous vote of the seven members present.

Item 2. February 2003 Minutes. Unanimous vote to approve minutes by the seven present voting members.

Item 5. Labor Dispute Rule and Item 6. Attendance/Misconduct Rule. These two items are for caucus.

Item 9. Governor’s Proposed Budget – Changes to Chapter 108. First proposed change is apprenticeship issue, which will be discussed later today. Another change in the proposed budget is that certain duties performed by the state treasurer will now be performed by Dept. of Administration. Language for these will be passed out at the next meeting. It is appears to be a fairly mechanical provision. Mr. Buchen stated that this might become an issue in the legislature.

Item 10. Work Search Options. The law requiring two work search efforts did sunset and the Council wished to get some ideas on possible changes relating to work search. Ms. Breber passed out some recommendations. She suggested that for persons who are job-attached, UI would waive work search requirements. Job-attached means anyone who continues to work, probably part-time, for an employer, or for anyone who has an expectation of returning to work for an employer. On the other hand, those not job-attached would be required to do the work search at whatever number of efforts the Council determines.

Ms. Breber went over how the department currently determines whether a work search should be waived. The Council had several questions relating to various issues relating to work search, seasonal employment, temporary help, customary employers, and unions.

Item 11. Benefit Fraud Report. Ms. Laudenbach provided the yearly report on fraud activity [handout]. UI attempts to use automated systems to prevent fraud in the first place. The report includes the types of detection of overpayments. UI pays benefits based on the employee’s report of wages and if there is a difference between employee and employer amounts, UI issues an overpayment that is usually minor. UI has a new automated system for the new hire crossmatch, which means we cross-match our claim file against a new hire database on an immediate basis. This immediate cross-match gives UI notice of anyone who continues to claim benefits after a claimant starts a new job, usually within the first one or two weeks from the start of the job.

The DOL is interested in overpayments and is going to establish goals based on the quality control numbers. UI currently performs well above the DOL’s [anticipated] standard.

Prosecution of benefit fraud is performed by in the county where benefits are filed. UI submits cases requesting prosecution to the [proper] district attorney’s office. Ms. Laudenbach commented that the faster we can recover the money, the more UI can get back, which is why UI tries to catch fraud early. Council had questions about how prosecution works, length of time to collect, amounts of overpayments established, and amounts collected.

Item 3. Apprenticeship Funding Issue. Secretary Gassman thanked the Council for its work and stated that Governor Doyle appreciates the Council’s commitment. She said that with the state’s projected $3.2 billion deficit, the administration is looking at doing things outside its normal parameters. She said that the apprenticeship program is usually (GPR) state-funded, but the governor wished to use [UI] Reed Act funding for the program to balance the state budget. She stated that she spoke to Mr. Buchen and Mr. Neuenfeldt about the issue.

UI has been funding two positions out of old Reed Act for about four years. There was a question whether it was valid to fund apprenticeship positions under Reed Act. DOL said UI could use Reed Act funds for anything for which you could use Wagner-Peyser funds, and Wagner-Peyser fund could be used for apprenticeships. The funding of these positions was done in a prior budget [bill]. The apprenticeship program regulates training standards of apprentices. There are 11,000 to 12,000 apprentices. UIAC labor member Mr. Penkalski is also a member of the Apprenticeship Council.*

Mr. Lump stated concern about this action because our focus should be on UI. Motion was made to approve the use of Reed Act funds for the apprenticeship program next biennium and just that period, recognizing that this is a unique fiscal circumstance that the state finds itself in and these funds must be preserved for the payment of benefits. The Council approved Reed Act funds, believing that the amount was about $1 million, which was the general amount as described to the chairperson, although no precise amount was provided. The vote was unanimous in favor of approval by the seven members present.

Letter from Senator Michael Lehman on behalf of Town of Cedarburg – Tom Smith stated that a second legislator has asked the Legislative Reference Bureau to look at this type of issue, and the department would like the Council to look at the options for when this situation occurs. A township employee was being investigated for theft. She quit prior to the completion of the investigation. [The employee found another job, which she held for several months.] The employee then claimed benefits after the separation from the second job and was allowed benefits. The Town of Cedarburg objected to having to pay, but the administrative law judge ruled that UI law does not provide for a noncharge [from a quit] to a government entity employer, which is a reimbursable employer. The ALJ also ruled that even though the employee subsequently was convicted for theft with the Town of Cedarburg, since the conviction occurred after the employee quit, the Town may still be charged benefits under UI law. The employer township wants us to deal with this situation. There is some thought that this type of occurrence undermines confidence in our system. The department plans to work further on this issue.

Letter from a senior living facility administrator complaining about benefits allowed to a person who was absent and late—The adjudicator determined that the absences and tardies in this situation were for valid reasons and thus not misconduct. The employer was unhappy but did not appeal. She is asking for a bright line standard.

Letter complaining that the exception to benefit reduction for a corporate shareholder is too restrictively interpreted – Under current UI law, if a person owns 25% in an individual corporation or 50% in a family corporation, that person is limited to unemployment benefits equaling 10 times the weekly benefit rate. The exception is if there’s a formal dissolution of the corporation, a corporate bankruptcy, a personal bankruptcy by all owners or disposition of [75%] or more of the assets.

Here, the corporation was in the process of dissolution, which had not been completed. Benefits were denied because that requirement was not met at the time the claim was filed. LIRC affirmed and said that the dissolution must precede and cause termination. The person writing thinks this should be changed. Ms. Breber stated that we cannot set aside a benefit year unless exceptional circumstances exist, but this set aside test has never been applied to a case to this. Mr. Smith stated that the reason the formal requirement of dissolution in our law was to resolve the gray area of corporate quits. The courts say that that is sufficient grounds for denial of benefits. Greg stated that we will bring it up on the next agenda.

Greg stated that lunch would be served and that the members could caucus afterward to deliberate. Buchen moved to go into separate closed caucuses for the purpose of deliberating on proposed law changes. Authority for closed caucuses is in sec. 19.85(1)(ee) of the Wisconsin Statutes. Vote to caucus was unanimous of members present, which included Buchen, Petersen, Gustafson, Lump, Oyler, Neuenfeldt and Penkalski.

* This was stated in the meeting but omitted in the initial version of the minutes.